Source: Snowball APP, Author: Great Wall research macro strategy, (

In the past 20 years, the Indian stock market has performed strongly.Since January 2000, India’s Sensex30 Index has been nearly 12.6 times, and its gain far exceeds, Tokyo and Index.

The rising India’s stock market is mainly due to the loose currency environment, the toughness of the economic fundamentals, the preferential policies of foreign capital, and a relatively complete stock market supervision system.

In terms of economic fundamentals, in the past 20 years, India’s actual GDP growth rate has remained high. From 2000 to 2019, the actual GDP compound growth rate was 6.68%year -on -year, which is one of the fastest -growing countries in the world.As of February 2024, the Indian manufacturing, service industry, and comprehensive PMI were all above the Rongku Line, and the economic overall expansion trend.India’s population structure is young and has not yet entered an aging society.

From the perspective of the currency environment, India has been in a relatively high position for a long time; the amount of currency supply has continued to increase. Since 2000, India’s M2 has turned about 18.23 times; the Declanquerism of the rupees has reached 90.6%relative to the US dollar.At the same time, since September 2015, the P / E ratio of the Mumbai Sensex30 Index has not risen significantly.After considering the inflation, the actual increase in the Mumbai Sensex30 Index was 613.31%, which was only half the time when the inflation was not considered.

In terms of foreign capital, the Indian government has introduced incentive policies including the reform of foreign investment admission systems and corporate tax reforms, and foreign direct investment shows an upward trend.

In terms of the stock market system, the Indian stock market does not have a period of "delisting risk warning", and the punishment for mandatory delisting is severe.The derivatives trading market has continued to expand its capacity under the promotion of the State Exchange, and the low -rate charging mechanism has reduced the cost of short -term transaction.In addition, the reform of the company’s system has promoted industry innovation, bringing significant changes in market practice and transaction activity.

Risk reminder: India’s trade deficit increases risks, India’s unemployment rate exceeds expected risks, Indian manufacturing recovery is less than expected, and overseas ground political development exceeds expectations.

1. Indian stock market has risen for a long time

Since January 2000, the Indian Mumbai Sensex30 Index has risen from 5375.11 on January 3, 2000 to 72500.30 points on February 29, 2024, up 12.60 times; during the same period, from 1455.22 points to 5096.27 points, an increase of 2.50 times.The Mumbai SenseX30 index increases 4.99 times.Two years after the epidemic, the Mumbai Sensex30 Index increase at a high level at the world’s major stock indexes, and in 2020 and 2021, the annual increases were 15.60%and 21.69%, respectively.In 2022, the S & P 500 index fell 19.95%and 10.95%, respectively, while the Mumbai Sensex30 Index remained positive growth, achieving an increase of 2.80%throughout the year.

The yield of Mumbai Sensex30 continued to go higher than other major indexes in the world. From 2000 to February 29, 2024, the yield of Mumbai Sensex30 was 1248.82%.

2. Analysis of the reasons for the rise of the stock market

1. India’s economic fundamentals are strong

India’s actual GDP growth rate remains high and is one of the countries with the fastest economic growth rate in the world.From 2000 to 2019, the actual GDP growth rate fluctuated between 0.24%and 13.26%, and the actual compound growth rate of the actual GDP was 6.68%year -on -year.Affected by the epidemic, in the second quarter of 2020, India’s actual GDP growth rate fell to 23.24%year-on-year, and then rose quickly to 21.55%in the second quarter of 2021.At present, the actual GDP growth rate of India has fallen slowly. As of the third quarter of 2023, India’s actual GDP growth rate was 7.64%year -on -year.

From October 2009 to February 2020, India’s PMI showed a downward trend.The manufacturing PMI was below the Rongku Line in August to October 2013, December 2015, December 2016, and July 2017, and the rest of the time kept expanding.The fluctuations in the service industry are slightly greater than the manufacturing industry. From August 2013 to April 2014, the service industry PMI was less than 50 consecutive months. From August 2021 to the present, India’s PMI overall expansion.As of February 2024, the Indian manufacturing, service industry and comprehensive PMI were 56.70 and 62.00, respectively, all located above the Rongku Line.

India’s population structure is youngKolkata Stocks. In 2022, the population of 65 and over accounted for 6.9%, and has not yet entered an aging society.Judging from the age structure of the population in 2022, Indians’ population is still high, and the labor population of middle -aged and middle -aged is relatively sufficient.

2. Inflation is a great help for the continuous rise in the Indian stock market

From January 2000 to the present, the Indian Mumbai Sensex30 Index has risen from 5375.11 on January 3, 2000 to 72500.30 points on February 29, 2024, an increase of 1248.82%. At the same timeEssence

India has been in a high position for a long time.From January 2014 to January 2024, India’s CPI increased average by 5.17%year -on -year.From January 2014 to January 2019, India’s CPI fluctuated in an overall fluctuations, from 8.6%to 0.8%, and the price increase was effectively controlled.In 2019, the Indian CPI rose rapidly year -on -year, and then fluctuated between 7.61%and 4.06%.In January 2024, India’s CPI growth rate was 5.1%year -on -year.

In recent years, affected by input inflation, Indian food and energy prices are high.Indian food and beverages account for 45.86%, which is the main factor that affects 6.84%of power fuel.Since January 2014, India’s CPI points have been on the rise. As of January 2024, the CPI of food and beverage was 190.1 (2012 = 100), and the fuel and power CPI was 180.9, which promoted the overall price level of India.The year -on -year growth rate of food and beverage CPI is also high. As of the latest data, in January 2024, the year -on -year growth rate of food and beverage CPI was 7.58%, which was 5.08%higher than the average since 2014.

Since 2000, India’s currency supply has risen significantlyBangalore Wealth Management. M2 has increased from 336.29 billion rupees in January 2000 to 6128.91 billion rupees in December 2023, an increase of about 18.23 times; the average year -on -year growth rate of M2 was 13.15%.Since February 2021, the year -on -year growth rate of India’s M2 has declined. As of December 2023, India’s M2 growth rate was 7.02%year -on -year.

India’s high financial deficit may be a major cause of currency supply.From 2014 to 2017, Indian fiscal deficits accounted for GDP more than 6%. At the same time, the government’s income account and overall account deficit continued to high. In 2017, the overall surplus was -897.08 billion rupees, and the income account surplus was -3588.83 billion.

The exchange rate of the US dollar against the rupee also showed a significant upward trend. From the $ 1 US dollar on January 3, 2000, it rose to Rs $ 43.48 to the US $ 82.89 rupee on February 27, 2024. The Dechat depreciation of the rupee reached 90.6%.The current US dollar exchange rate of the rupee is smooth. From January 2023 to February 27, 2024, the US dollar exchange rate fluctuates between 81.22 rupees and 83.40 rupees.Considering the depreciation of the rupee, after the Indian Mumbai Sensex30 Index was converted into the US dollar, the actual increase in the Mumbai Sensex30 Index has increased by 607.23%since 2000, which was 2.43 times the increase in the same period.

From the perspective of valuation to prove that the P / E ratio of the Mumbai Sensex30 Index is maintained in the range of 20 to 25. The stock price rising has not driven the stock valuation to increase significantly.From September 11, 2015 to December 2019, the P / E ratio of the Mumbai Sensex30 Index was fluctuating.After the epidemic fluctuations, the index price -earnings ratio gradually fell to about 20 in June 2022.In 2023, the valuation of the Mencius Sensex30 Index was stable between 20.97 times and 24.40 times, which was roughly comparable to 10 years ago.As of February 26, 2024, the P / E ratio of the Mumbai Sensex30 Index was 23.08 times, which was 0.18 times lower than the median since 2015, and the historic point value of the P / E ratio was 45.70%.

3. Policy discounts attract foreign capital to greatly inflow

The Indian government has introduced some measures for foreign capital to attract foreign funds.After Modi served as the Prime Minister in 2014, he vigorously promoted the reform of the investment access system, abolished foreign investment permits, and implemented a negative list system.Except for the "negative list" of some national strategic departments, other industries have adopted a "automatic path" approval system.Under the channel for automatic approval, foreign investment does not require government approval to enter the Indian market, which greatly simplifies investment procedures and the efficiency of foreign investment.In addition, India also carried out corporate tax reform to inspire the market and introduced a series of foreign supporting policies.

Since 2000, the total purchase amount and total sales of foreign institutions on India’s equity investment have been on the rise.

Since 2014, India’s foreign capital inflows has risen at a speed of uniform speed, with an average growth rate of about $ 9.305 billion per quarter. As of September 2023, India’s foreign capital inflows have reached US $ 6550 billion.Foreign direct equity investment in India also fluctuated. From the second quarter of 2000 to the third quarter of 2023, foreign direct equity investment rose from 29.88 billion rupees to 816.61 billion rupees, an increase of 2632.97%.

4Hyderabad Investment. The Indian stock market system is relatively complete

Indian stocks do not have a period of "warning risk of delisting", and the punishment for mandatory delisting is more severe.my country’s current delisting system is a delisting system with the warning of the delisting risk. The company’s delisting requires a long transition period.According to the research report of the Indian Stock Exchange of the Global Stock Exchange’s Research on the Global Stock Exchange in August 2020, the Indian Exchange’s delisting of the so -called "transition period" is not available in the Indian Exchange’s delisting procedures.Once the exchange believes that the listed company has a need to suspend trading, it is approved by a special group resolution, and its resolution will take effect immediately after the appeal period on the 15th.From the consequences of delisting, Indian companies have been punished very harshly that they have been forced to delist, and they have been implemented to directors and initiatives of listed companies.

Derivatives have continued to expand, and the liquidity of the Indian market has increased.Driven by the State Exchange (NSE), derivatives were officially launched on the two major exchanges in June 2000 in June 2000.The original trading products were only stock index futures, namely the Sennex Index Futures of the Mumbai Exchange and the S & PCNXNIFTY Index Futures of the State Exchange. From June to July 2001, the options of these two major indexes were launched.

The transformation of the company’s company system is an important promoter for the rapid development of the capital market.In 1992, the first corporate exchange of India -the National Exchange was born. In 2005, the Mumbai Exchange was also restructured into a corporate system.According to the research report of the Indian Stock Exchange of the Global Stock Exchange’s Research on the Global Stock Exchange in August 2020, with the competition of the Mumbai Exchange and the National Exchange, the Indian Exchange Industry has continued to innovate.The micro -structure, market practice and transaction activity of the Indian securities market have undergone tremendous changes.In terms of micro -structure, on the one hand, the State Exchange uses electronic and digital technology to comprehensively improve the trading system, integrate transactions, settlement, settlement and custody processes, and take the lead in adopting a transparent and efficient fully automatic screen trading system NEAT;The exchange became a corporate legal person, laying the foundation for the market -oriented competition of the exchange; in terms of transaction activity, the electronic trading system reduced transaction costs and took the lead in introducing the national exchanges of the electronic trading system to the Mumbai Exchange.

Introduce a low -rate charging mechanism to reduce the cost of short -term transactions.Prior to the transaction fee reform in 2018, the trading fee of the Mumbai Exchange was to charge a fixed hand fee of 1.5 rupees from the buyer and the seller; the national exchange charged at a certain percentage of each transaction quota.It is 0.00325%, and the charging mechanism of the State Exchange is considered to be more conducive to short -term transactions and risk transactions related to derivatives, which is in line with the risk preferences of mainstream investors.

The Indian trade deficit is increasing.Long -term deficit of India may lead to risks such as decline in foreign exchange reserves and fluctuations in exchange rate fluctuations.

India’s unemployment rate exceeds expected risks.India still has problems such as high unemployment rate and imbalance in employment structure.It may lead to risk such as social instability and increased government financial pressure.

Indian manufacturing is not as good as expected.The manufacturing industry occupies an important position in the Indian economy. Its recovery is not as good as expected to have a negative impact on the entire economy, including the decline in investor confidence.New Delhi Investment

Overseas ground political development exceeded expectations.Regional conflict, political turbulence or tension may have a negative impact on commercial activities.

Securities research report:

"Analysis of the Rising Causes of the Indian Stock Market"

Release time:

March 14, 2023

Report release agency:

Great Wall Securities Co., Ltd.

Analyst of this report:

Wang Yi S03

Great Wall Securities Research Institute Market Strategy Research Team:

Wang Yi, Wang Xiaolin, Wang Zhengjie, Ding Haochen, Jian Yuhan, Yang Bowen

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